Russia interested in long-term gas transit via Ukraine

Russia interested in long-term gas transit via Ukraine
# 20 November 2019 08:14 (UTC +04:00)

Russia is interested in long-term transit of gas via Ukraine but only when all the court claims are settled, a senior Russian lawmaker said on Tuesday, APA reports citing TASS.

"First of all, I would like to stress once again that Russia is interested in continuing gas transit via Ukraine," said Pavel Zavalny, chairman of the energy committee of Russia’s State Duma lower parliament house. "This is the shortest way to deliver gas to clients in Eastern and Southern Europe using the well-developed gas transport system. That is why, we would apparently want to keep transit via Ukraine in place."

According to Zavalny, Gazprom’s initiative to drop all mutual judicial claims as a prerequisite for further cooperation demonstrates its interest in long-term mutually beneficial and politics-free commercial relations.

The lawmaker recalled that Russia had alternative options for gas supplies to European clients, such as Nord Stream-2 and Turk Stream. It could also increase LNG exports, he noted.

"It should be noted that it is not in the interests of our Ukrainian partner in a long-term perspective if no agreement is reached on the Ukrainian transit for the coming winter. Given all the problems, Europe may finally doubt the expediency of maintaining this route at the expense of such colossal political efforts," he stressed.

Russia’s Gazprom on November 18 sent an official offer to Ukraine’s Naztogaz to extend the current or sign a new contract on gas transit via Ukraine in 2020. Among obligatory conditions, it cited dropping mutual claims at the international court of arbitration and terminating all litigations. It also insisted the Ukrainian side should cancel the ruling of its Antimonopoly Committee to fine Gazprom for alleged "violation of economic competition" and recall Naftogaz’s motion on launching a European Commission’s investigation against Gazprom.

The current contracts on gas supplies to and transit via Ukraine expire on December 31. By that date, Russia plans to commission two gas pipelines bypassing the Ukrainian territory - Nord Strem-2 and Turk Stream. Ukraine, in turn, has commitments to introduce the European energy laws by the yearend.

Russia is ready to conclude a gas transit contract under the European rules in case Ukraine manages to complete all the relevant procedures. As a fallback option, the Russian side suggests the current contract be extended for 2020. Apart from that, Russia is ready to resume gas supplies to Ukraine, which stopped in 2015, at a price reduced by 25%

The dialogue is being complicated by the legal wrangling between Gazprom and Naftogaz. Moscow insists on the so-called "package solution" when the parties are to drop mutual claims and the $6.5 billion fine on Gazprom is canceled but Naftogaz says it would not abandon its suits against Gazprom.

Another round of trilateral consultations involving Russia, Ukraine and the European Commission is scheduled for late November.